The Commons: Fear of a red planet

The Scene. And so the fate of the nation seems to be found in the fine print of the Canada-China Foreign Investment Partnership Agreement. In there is either our bountiful prosperity or certain doom.

“Mr. Speaker, under the Prime Minister’s new Canada-China investment agreement, the Chinese state would have the right to buy up new oil leases and expand operations in Canada,” Thomas Mulcair announced this afternoon, leaning in then for emphasis, “as if it were a Canadian company. Any effort to limit ownership by China could be challenged, under the law.”

Great amounts of our democracy have lately been devoted to the affairs of China. And on this FIPA there are demands for still more debate.

“Let us be clear,” Mr. Mulcair ventured. “The Prime Minister is exposing Canada to a scenario in which the Government of China could sue us if the Government of Alberta refuses to sell off its natural resources.”

Now the NDP leader turned to directly face and stare down the sitting Prime Minister.

“Is this how Conservatives stand up for Canada?” Mr. Mulcair begged.

Mr. Harper begged to differ. Which is to say he disagreed fully and entirely.

“Mr. Speaker, that is just completely and utterly wrong,” he sighed. “Under this particular agreement, the government’s powers and prerogatives under the Investment Canada Act are protected. We will continue to evaluate whether investments are in the net benefit and best interests of this country.”

The Prime Minister proceeded to explain. “At the same time, Canadians who are allowed to make investments in China would have a framework: the rule of law that would protect them in that way,” he said. “They would be able to promote Canadian interests and promote the job creation for Canadians in China. It is very important that we have these rights. The Chinese have long had rule of law protection in this country. We need the same thing in China.”

Across the way, Mr. Mulcair and Nathan Cullen muttered to themselves, apparently unimpressed with the Prime Minister’s version of events.

That might’ve been that for the day except that, this being Thursday, it was Elizabeth May’s turn to ask the final question of the afternoon.

“Mr. Speaker, now that the Canada-China investment treaty can be legally ratified as soon as tomorrow, I wish to make one more plea to the Prime Minister to reconsider,” she offered from the furthest corner.

“He should examine the Australia experience,” she explained. “That country has a much larger volume of trade between Australia and China, in fact, six times as much. There is $60 billion in Chinese investment in Australia, and $7 billion in Australian investments in China. Why do I mention it? Because the Australians did an independent risk/benefit analysis of this kind of investment treaty, and decided the risks outweigh the benefits to their sovereignty and to their economy.”

True to her word, Ms. May concluded not with a question, but with a plea. “Please do not ratify,” she begged.

Mr. Harper decided to stand and take this one. “Once again, Mr. Speaker, as we have known for some 20 years now, Canada has been trying to secure protection for job-creating Canadian investments in the Chinese marketplace. This is something that those who create jobs in this country have long wanted,” Mr. Harper explained. “We have been pleased that we have been able to take this step forward and I notice there has been universal good reception to this agreement from those who are creating jobs for Canadians. Obviously, this government is going to move ahead and make sure that we are able to access that important market and build jobs throughout this country.”

Foreign ownership of natural resources in Canada is governed by the Investment Canada Act, this should not be rocket science to even the most junior of a political hack working on Parliament Hill

Under Annex D34 it specifically states that decisions made under the Investment Canada Act “shall not be subject to the dispute settlement provisions under Article 15 and Part C of this Agreement”

In other words the proposed FIPPA Agreement does NOT override the investment Canada Act.

On a different note, and I may be mistaken, but I believe that the Harper Government has been the first to actually “say no” the foreign acquisitions – I cannot recall either Paul Martin or Chrétien saying no under the Investment Canada Act. Maybe someone could clarify this point.

Getting back to Mulcair, the man is an idiot if he didn’t read Annex D34 or he is clueless on the Investment Canada Act. Either way his comments were not in any way accurate.

Not to mention, even if Annex D34 did NOT exist, China still would not have the right to sue (as Mulcair wrongly said they could), as it in pointed out in Article 15 of the FIPPA Agreement any dispute ends up in an arbitration process and NOT the court system. Once again proving that Mulcair cleary did not read the agreement or he is blatantly telling lies.
Either way it is a Mulcair farce of the highest order.

You’re correct that Annex D34 infers the FIPA does not override the Investment Canada Act. HOWEVER, as you surely read, D34 states the Investment Canada Act only trumps FIPA in regards to the initial approval of an investment. It does not override anything in FIPA terms of what a Chinese company can do once it has already been approved to acquire a Canadian company.

Which brings us back to Mulcair’s statement, which was not about an initial aquisition, but worded as follows:

“the Chinese state would have the right to BUY UP NEW OIL LEASES and EXPAND OPERATIONS in Canada” (my all caps)

FIPA clearly states if China already owns a Canadian company, that Chinese-owned company must be treated the same as a domestically-owned company. In Alberta, oil leases are auctioned off, highest bidder wins. Alberta cannot arbitrarily deny a company oil leases based just on its ownership if it otherwise wins the auction. If Alberta were to deny leases to a Chinese-owned company, that company would have basis to sue.

NOT an arbitration process, which you point out. That process only applies to the “Contracting Parties”, which at the top of the document explicitly state are the Government of Canada and the Chinese government. Such a lawsuit would not involve them, it’d be between the company and the Government of Alberta.

Mr. Mulcair’s point is valid. Your arguments, although I applaud the effort, are not fully researched and are incorrect.

I do not as a practice comment on blogs but Matlocks comments are dangerously exagerated.

Fal on November 1, 2012 at 9:29 pm

Don’t leave me hanging’ here – care to elaborate, Fal?

The_Original_Matlock on November 1, 2012 at 9:45 pm

More rhetoric…

nakedApe42 on November 1, 2012 at 9:48 pm

Hi Bill!

lenny on November 2, 2012 at 1:04 am

You should resume your regular practice.

Thwim on November 2, 2012 at 1:22 am

Thwim, I’m just amazed that he reads these blogs and thinks my comment is the most dangerous thing here.
… has he READ these comment boards? :)

The_Original_Matlock on November 2, 2012 at 10:04 am

Exactly. FIPA Opponents should better educate themselves and read John Ivison’s excellent column on this topic.

Bill on November 2, 2012 at 11:08 am

I did read Ivison’s article just now. Evidently you didn’t as it exactly confirms what I’ve been telling you:

“But while Mr. Mulcair is misguided, he is not utterly wrong. Once the FIPPA comes into effect, any Chinese firm already operating in Canada would be eligible to buy new leases at an auction. If Chinese companies were excluded from the process, they could claim discrimination and sue. The only way Chinese firms could be blocked from bidding is if Canada decided to bar all foreigners.”
(not to ruffle my own feathers, but my argument did get posted before Ivison posted his article – I am not just regurgitating his article)

The_Original_Matlock on November 2, 2012 at 11:48 am

Of course a foreign owned company, once approved by the Government of Canada (under the Investment Canada Act) , can turn around and invest. That is the whole point of foreign investment. In your hypothetical example (and it is hypothetical) what would you expect a foreign owned resource company to do in Canada but to engage in investment related activities?

Foreign owned resource companies have long been bidding on Provincial resources sales –and likewise they have always been treated fairly under the rule of law. However that does not change the fact that foreign ownership with respect to resource acquisitions is still covered by the Investment Canada Act, which is NOT overridden by this FIPPA agreement – a point that even you concede.

And by the way – both the BC and Alberta Governments support the FIPA agreement – but nice hypothetical try with a straw man argument.

Bill on November 2, 2012 at 10:57 am

Hey Bill, you said Mulcair’s comments were “completely untrue”, and that he either didn’t read “annex d34” or he’s an “idiot”. But as Matlock’s comment makes clear, you’re the one that’s full of sh!t. At least stop the handwaving and save some shred dignity.

lenny on November 2, 2012 at 11:20 am

I posted the factually accurate section of the FIPA agreement that is clear that the FIPA agreement does NOT override the Investment Canada Act. This point is true, even our insightful “non” NDP friend Matlock agrees on this point. However Matlock has suggested that after an approval process then indeed a foreign owned company can invest fairly and equally under the rule of law, which is also true. However, from my read on Mulcairs’s comments. Nowhere did he make such a disclaimer that his comments were “post investment” at which point they would become technically true.

What Mulcair actually stated on this point was ….

“Mr. Speaker, under the Prime Minister’s new Canada-China investment agreement, the Chinese state would have the right to buy up new oil leases and expand operations in Canada” – Mulcair

This is not true. Under the FIPA agreement any Chinese States owned company would be required to receive the consents to first acquire a Canadian resource company BEFORE they could bid or otherwise engage in any investment related activity and this consent is subject to the Investment Canada Act. Re-read the FIPA agreement if in doubt. At no time did Mr. Mulcair preface or otherwise make any type if disclaimer that his comments were “post investment”

I do find it both interesting and entertaining the effort some will attempt to try and exonerate Mulcair’s untrue statement by inserting words and a “post investment” pretense that was never used by Mulcair. Yes, after the fact we can add a “post investment” pretense to try and justify Mulcairs comments but that is not what he said yesterday in the House.

I would speculate that post investment is WHAT he was supposed to say but he likely flubbed the delivery of his comments and ended up saying something untrue. This is why supposedly non-NDP supporters have such great insight in what Mulcair meant to say (but failed too) Carry on……

Bill on November 2, 2012 at 12:24 pm

“Supposedly non-NDP supporters”??
Not a chance I’d ever vote for Tom Mulcair. His Dutch disease arguments are bunk, and I disagree with cap-and-trade. I already told you my position on that.
If 2015 comes around and the only viable options on the ballot are Harper and Mulcair…. I’ll eat my ballot.
Meanwhile I find it both interesting and entertaining the effort some (i.e. you) will go to to try and call politicians liars based on arguments exposed as flimsy. If I were to call someone a liar, I’d make sure my support was rock-solid.

The_Original_Matlock on November 2, 2012 at 12:56 pm

“This is not true. Under the FIPA agreement any Chinese States owned
company would be required to receive the consents to first acquire a
Canadian resource company BEFORE they could bid or otherwise engage in
any investment related activity…”

Why?

lenny on November 2, 2012 at 1:08 pm

Odd that you would construct your own straw man argument as the basis of accusing me of constructing a straw man.

Let’s recap our conversation:
-You state Mulcair’s agreement is untrue and he should read the agreement.
-You elaborate stating FIPA does not override the Investment Canada Act.
-I point out this is only in the case of an initial acquisition, and that Mulcair’s question was not on an initial acquisition but the activities of a foreign-owned company post-acquisition. I didn’t comment at all whether it is a bad thing that China could buy up a pile of oil leases (but since you ask, I’m all for China buying every single oil lease they can so long as there are no national security concerns – I am pro-free markets, Bill). My conclusion was that Mulcair’s premise was valid and that he did understand the agreement.
-You then counter as if Mulcair is still questioning initial acquisitions, not ongoing activites. You then also point out BC and Alberta support of FIPA, suggest my argument was that FIPA was bad. I did not argue this. You’re arguing against a point I am not making.

THIS IS THE DEFINITION OF A STRAW MAN, BILL.

As an aside, a good answer on Harper’s part would have explained why we need foreign investment in this country. Instead, he tried to suggest the Investment Canada Act would protect against the scenario Mulcair laid out. As I’ve plainly laid out, it doesn’t.
Rebuttal?

The_Original_Matlock on November 2, 2012 at 11:21 am

I think we are getting to the point of splitting hairs in this discussion. Ultimately my point was that the FIPA agreement could not override the Investment Canada Act – a point that you have also agreed upon is true.

From my perspective once a foreign company is granted status by the Government of Canada then indeed it can invest – something apparently you (and certainly I) both support. On this point we agree.

Where we seem to disagree is that I see the thrust of this debate as being that the FIPA agreement cannot override the Investment Canada Act – Once a foreign ownership acquisition is approved then to me it is a no brainer that said company would turn around and invest, again that is the entire point of foreign investment.

Here is my quick question for you – where does Mulcair clearly state “post acquisition” in his comments made in the House yesterday?

Because we both seem to agree that FIPA does not take precedence over the Investment Canada Act, and likewise we both agree that an approved foreign owned resource company would be expected to invest – hence the point of foreign investment in the first place. These points we agree on but where does Mulcair makes this “post investment” disclaimer in his comments yesterday ?

Bill on November 2, 2012 at 11:51 am

“Ultimately my point was that the FIPA agreement could not override the Investment Canada Act”

Bullshit, Bill. Your original comment is right there for all to see, and is itself clearly and demonstrably bullshit:

“Mulcair should try actually reading the agreement. It is clear that what he said in the Commons today is completely untrue.”

lenny on November 2, 2012 at 12:05 pm

Sorry I intended my recent reply to this comment form you Lenny…
I posted the factually accurate section of the FIPA agreement that is clear that the FIPA agreement does NOT override the Investment Canada Act. This point is true, even our insightful “non” NDP friend Matlock agrees on this point. However Matlock has suggested that after an approval process then indeed a foreign owned company can invest fairly and equally under the rule of law, which is also true. However, from my read on Mulcairs’s comments. Nowhere did he make such a disclaimer that his comments were “post investment” at which point they would become technically true.

What Mulcair actually stated on this point was ….

“Mr. Speaker, under the Prime Minister’s new Canada-China investment agreement, the Chinese state would have the right to buy up new oil leases and expand operations in Canada” – Mulcair

This is not true. Under the FIPA agreement any Chinese States owned company would be required to receive the consents to first acquire a Canadian resource company BEFORE they could bid or otherwise engage in any investment related activity and this consent is subject to the Investment Canada Act. Re-read the FIPA agreement if in doubt. At no time did Mr. Mulcair preface or otherwise make any type if disclaimer that his comments were “post investment”

I do find it both interesting and entertaining the effort some will attempt to try and exonerate Mulcair’s untrue statement by inserting words and a “post investment” pretense that was never used by Mulcair. Yes, after the fact we can add a “post investment” pretense to try and justify Mulcairs comments but that is not what he said yesterday in the House.

I would speculate that post investment is WHAT he was supposed to say but he likely flubbed the delivery of his comments and ended up saying something untrue. This is why supposedly non-NDP supporters have such great insight in what Mulcair meant to say (but failed too) Carry on……

Bill on November 2, 2012 at 12:25 pm

You called Mulcair a liar, so the onus ought to be on you to point out, where does he mention the acquisition of a company?
He doesn’t. He talks about the acquisition of oil leases. A company would be ridiculous to buy Alberta oil leases unless it already owned operations in Canada (otherwise how the heck would they use them). Acquisition of oil leases isn’t covered by the Investment Canada Act, so whether the Investment Canada Act overrides FIPA is a moot point.
Which means your calling Thomas Mulcair a liar is inaccurate.
You might do well to retract your first comment. Please.

The_Original_Matlock on November 2, 2012 at 12:21 pm

It boggles my mind how far you will go to defend Muclair. Let’s review Mulcair’s statement….

“Mr. Speaker, under the Prime Minister’s new Canada-China investment agreement, the Chinese state would have the right to buy up new oil leases and expand operations in Canada” – Mulcair

You know full well that the Chinese Government COULD NOT directly “buy up” oil leases. Where we both agree is that the a foreign owned Canadian resource company could bid on or buy up leases but that begs the question as to how that resource company would come under foreign ownership in the first place – this would be subject to the Investment Canada Act – a point you originally agreed upon as you said previously…

“You’re correct that Annex D34 infers the FIPA does not override the Investment Canada”-Matlock

And now are recanting on that as you most recently stated…

“I didn’t concede this, and your statement is untrue”-Matlock

In other words you are moving the goalposts my friend. And why are you moving the goalposts ? Because the only possible way Mulcair’s comments COULD have been close to being accurate is if he had clearly stated that they were intended “post-acquisition” a point that I commend you for having the ability to recognize – only problem is that Mulcair failed to do the same and made no such disclaimer in his comments yesterday.

As it stands Mulcair’s comments…

“Mr. Speaker, under the Prime Minister’s new Canada-China investment agreement, the Chinese state would have the right to buy up new oil leases and expand operations in Canada”

Remain untrue. The Chinese State does not have these rights no matter how you try and spin it. I will agree with you that Mulcair could have said this differently (clearly if you are not working for Mulcair you should be as you have a much better understanding of this FIPA agreement then Mulcair does) however that does not change the fact that what Mulcair said, as it stands, is wrong and while I know you will not admit to that, I recognize that deep down you know that Mulcair articulated his comments incorrectly and should have said them differently.

Obviously we are going in circles and are not going to agree and I have little interest in debating with those who will recant a point they already conceded to so I will let you have the last word on this.

Bill on November 2, 2012 at 1:21 pm

“You know full well that the Chinese Government COULD NOT directly “buy up” oil leases.”

Directly, no. But CNOOC can. And CNOOC is fully state-owned. Mulcair’s wording is maybe not ideal, but neither would I say is it misleading.

“And now are recanting on that as you most recently stated…”

Except you cut out the next sentence “HOWEVER, as you surely read, D34 states the Investment Canada Act only trumps FIPA in regards to the initial approval of an investment. It does not override anything in FIPA terms of what a Chinese company can do once it has already been approved to acquire a Canadian company.”

“As it stands Mulcair’s comments… remain untrue”

If you believe that, perhaps you should also follow up with John Ivison, as I’ve pointed out below – he believes otherwise. I would hope with the same vigour which you pursue Aaron Wherry.
I’d gladly continue this conversation with you if you wish. Otherwise good-day, sir.

The_Original_Matlock on November 2, 2012 at 1:41 pm

Forgot to address your statement:
“However that does not change the fact that foreign ownership with respect to resource acquisitions is still covered by the Investment Canada Act, which is NOT overridden by this FIPPA agreement – a point that even you concede.”
I didn’t concede this, and your statement is untrue.
Per Section 28, The Investment Canada act regulates a foreign company taking control of:
-the voting shares of a corporation
-the voting interests of a corporation
-company-owned assets
The Investment Canada Act regulates nothing about a foreign company acquiring government-owned assets. Assets such as oil leases.
Since the Investment Canada Act has nothing to say about oil leases, the default legislation is FIPA, which says a Chinese-owned company has the same rights as a domestically owned company to acquire oil leases. A point that even you concede, Bill.

The_Original_Matlock on November 2, 2012 at 11:37 am

Actually one thing Bill, unless you have a rebuttal to what I wrote, I would hope you would kindly retract your “idiot” comment. I disagree with much of what Thomas Mulcair puts forth as policy, but the man’s not an idiot. Such language does nothing to further our political discourse.

I use Aaron Wherry’ definition of a farce – which basically means if I personally disagree with it – I can proclaim it as a farce.

Bill on November 2, 2012 at 11:55 am

Question Period. Mentally ill teen gets mentioned. Ashley Smith a symbol of Vic Toews and Stephen Harper’s Canada.
If they had thought it was not allowed from the top and they would lose their jobs and reputations if exposed, they would not have done it. The overall atmosphere from Toews at the top said, this is a war on crime, and any one in federal prison is a criminal. War means war.

The Chinese government closely controls any foreign investment, the value of its currency and its domestic market. This is unlikely to change just because Harper and the Conservatives undo all of our protections. It is particularly insane as they have never done anything like this for any other country. If you invite someone into your home and allow them free use of your facilities why would you choose to invite the biggest most selfish b*stard in the neighbourhood?

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